R.J. Corman Railroad files lawsuit against Lexington Center Corp.

The concept seemed perfect: Have a dinner train depart from downtown Lexington, take passengers on a little excursion to Frankfort or Midway, feed them prime rib or scallops along the way, then shuttle them back. But those plans announced in 2010 never came to fruition. Now the stillborn dinner-train idea is at the crux of a lawsuit filed in U.S. District Court in Lexington.

As seen through the railing on Oliver Lewis Way, a view of the The RJ Corman Railroad building that houses their steam engine in the Cox Street lot behind Rupp Arena and The Lexington Center in Lexington, Ky., Friday, May 17, 2013. There is a legal dispute on whether the building can be there. Photo by Charles Bertram | Staff
Herald-Leader

This building houses "Old Smoky," a steam locomotive owned by R.J. Corman Railroad Co. The building is mentioned in documents accompanying a federal lawsuit that the company filed against Lexington Center Corp.
Lexington Herald-Leader

The RJ Corman Railroad building that houses their steam engine in the Cox Street lot behind Rupp Arena and The Lexington Center in Lexington, Ky., Friday, May 17, 2013. There is a legal dispute on whether the building can be there. Photo by Charles Bertram | Staff
Herald-Leader

The concept seemed perfect: Have a dinner train depart from downtown Lexington, take passengers on a little excursion to Frankfort or Midway, feed them prime rib or scallops along the way, then shuttle them back.

But those plans announced in 2010 never came to fruition. Now the stillborn dinner-train idea is at the crux of a lawsuit filed in U.S. District Court in Lexington.

At issue is a rail spur that extends east from R.J. Corman Railroad Co.'s Lexington yard, runs beneath a bridge on Oliver Lewis Way, and onto the parking lot owned by Lexington Center Corp. The spur leads to a glass-walled structure with red Churchill Downs-like spires that Corman erected last year to house "Old Smoky," a steam locomotive that once chugged through China.

In the complaint filed Monday, R.J. Corman Railroad Co. contends that Lexington Center Corp. wants to shut down the spur.

But the suit says Lexington Center can't deprive Corman of use of the spur without the "authority and approval of the Surface Transportation Board." That board is an arm of the U.S. Department of Transportation that regulates railroad rates, services and transactions.

The Lexington Center has not filed an answer to the suit. But the April 11 minutes of the center's executive committee says that Corman is in default and didn't abide by the terms of a 99-year lease signed in 2010. The minutes were filed as an exhibit accompanying the lawsuit.

The lease outlined the terms by which Lexington Center would allow the use of the land so Corman could operate a dinner train. Corman has operated a similar dinner train from Bardstown to Limestone Springs in Bullitt County since 1988.

Under the terms of the lease, Corman would pay rent of $1 a year to Lexington Center. In addition, for the first 10 years, the center would receive 5 percent of the dinner train's gross ticket receipts. The lease refers to this as "additional rent." From the 11th year on, Lexington Center would receive 5 percent of dinner train revenue linked only to groups holding conventions at the center and doing other business there.

The April 11 minutes of Lexington Center's executive committee indicate it "had endeavored to reach a resolution to the conflict on numerous occasions."

Nevertheless, Austin Mehr, legal counsel for Lexington Center, indicates in the minutes that Corman had defaulted by "failure to pay rent" and "failure to begin excursion service and construction of a building not authorized by the lease." The building is apparently a reference to the structure that houses the steam locomotive.

Mehr did not return a telephone call for comment. Bill Owen, president and chief executive officer of Lexington Center Corp., declined comment.

Lexington Center's executive committee unanimously voted at its April 11 meeting to send a notice of default and termination of the lease to Corman.

The suit asks a judge to "refer this matter" to the Surface Transportation Board, but it also asks the court to retain jurisdiction for the purposes of maintaining the status quo and to enforce decisions rendered by the board.

Noel Rush, vice president of strategic planning and development for R.J. Corman Railroad Group, told the Herald-Leader in April 2011 that the company remained optimistic about someday operating an excursion train between Lexington and Frankfort, but gave no specifics about when that might start. Rush said Friday he had no comment.

Representatives of Moynahan, Irvin & Mooney, the Nicholasville law firm that represents Corman Railroad Co., declined to answer questions about the suit.